A Level
BUSINESS Exam board: Edexcel
This revision book is packed with key notes that will help you gain a solid understanding
of each theme.
THEME THREE: Business decisions and strategy
CONTENTS 3.1.1 Corporate objectives page 49
3.1.2 Corporate strategy pages 49-51
3.1.3 SWOT analysis pages 51-52
THEME ONE: Marketing and people
3.1.4 Impact of external influences pages 52-55
1.1.1 The market page 4
3.2.1 Growth pages 56-57
1 3.2.2 Mergers and takeovers pages 57-59
3.2.3 Organic growth pages 59-60
3.2.4 Reasons for staying small pages 60-61
3.3.1 Quantitative sales forecasting pages 61-62
3.3.2 Investment appraisal pages 62-66
3.3.3 Decision trees pages 66-67
3.3.4 Critical path analysis pages 68-69
,1.1.2 The dynamic nature of markets page 5
1.1.3 Market positioning page 6
1.2.1 Demand page 6
1.2.2 Supply page 7
1.2.3 Markets pages 7-8
1.2.4 Price elasticity of demand page 8
1.2.5 Income elasticity of demand pages 8-9
1.3.1 Product/service design page 9
1.3.2 Branding and promotion page 10
1.3.3 Pricing strategies pages 10-12
1.3.4 Distribution pages 12-13
1.3.5 Market strategy pages 13-15
1.4.1 Approaches to staffing pages 15-17
1.4.2 Recruitment selection and training page 17
1.4.3 Organisational design pages 18-19
1.4.4 Motivation pages 20-21
1.4.5 Leadership page 22
1.5.1 Role of an entrepreneur pages 22-23
1.5.2 Entrepreneurial motivates/characteristics page 23
1.5.3 Business objectives page 24
1.5.4 Forms of business pages 24-25
1.5.5 Business choices page 26
1.5.6 Entrepreneur to leader page 26
THEME TWO: Managing business activities
2.1.1 Source of finance pages 27-28
2.1.2 Methods of finance pages 28-29
2.1.3 Limited liability page 29
2.1.4 The business plan pages 30-31
2.2.1 Sales forecasting page 31
2.2.2 Sales, revenue, costs pages 31-32
2.2.3 Breakeven page 32
2.2.4 Budgets page 33
2.3.1 Calculation of profit page 34
2.3.2 Statement of financial position pages 35-36
2.3.3 Business failure page 37
2.4.1 Methods of production pages 38-39
2.4.2 Capacity utilisation page 40
2.4.3 Stock control pages 41-42
2.4.4 Quality pages 43-44
2.5.1 Economic influences pages 44-47
2.5.2 Legislation page 47
2.5.3 The competitive environment pages 47-48
Theme one
1.1.1 THE MARKET
2
,MASS MARKET
Aimed at general population with a
generic product NICHE MARKET
Potential for large sales revenue A subset of the main market; addresses
Possible high competition, need to be specialist needs
competitive on price in order to succeed Few competitors but limited numbers of
EOS and lower average unit costs potential customers
Large volume of sales means high sales Businesses will have to compete on quality
revenue. This can be used for research and customisation in order to succeed
and development High profit margins as can charge premium
- High competition price
- Homogenous products need to be Small scale production so can be flexible and
differentiated through marketing, this can follow trends
be expensive Less competition than in mass markets
- High volume production isn’t flexible to - Very risky as demand may not be constant
demand changes - Higher unit costs so no EOS
DYNAMIC MARKETS
One that is subject to rapid or continuous changes
Adapting in a dynamic market
Being flexible in the way the business operates
Market research to have better understanding of the market
Investment in new technology, people, products
Continuous improvement
MARKET SIZE AND MARKET SHARE
Market size can be measured through: MARKET SHARE =
- VOLUME OF SALES: total quantity sold SALES OF A BUSINESS X 100
by business TOTAL SALES IN THE MARKET
- VALUE: total amount consumers spent
on product
Market share: the proportion (%) of a market that is taken by a business, product or
brand. It can be used as a measure of success
1.1.2 MARKET RESEARCH
PRIMARY RESEARCH
Original data gathered by researcher
+ Up to date information; reliable
3
, + Tailor to meet business needs
- Time consuming
- Expensive to conduct
- Low response rates can distort findings
- Is sample representative?
SECONDARY RESEARCH
Research that already exists. Conducted by another organisation
+ Easily accessible and a good starting point
+ Less time consuming
+ Better to collect quantitative data
- Detailed reports can be expensive
- Not always up to date or tailored to business needs
MARKET ORIENTATION
PRODUCT ORIENTATION The consumer is the most important factor when
Product is developed with quality/functions in providing products for the market. The business
mind but not necessarily in line with has a sensitivity to customer requirements.
customer requirements This helps business to respond to customer
Focus on what business is good at BUT it needs BUT needs can be fast changing, which
may not sell well this could be costly or potentially weaken the
brand
Benefits + limitations of market research
+ Reduces risk and cost of making poor decisions
+ To react to and prepare for changes in the market
+ To become market orientated
- Often biased
- Reliable?
- Collecting data is time consuming
- Cost effective; are costs worthwhile?
MARKET SEGMENTATION
An identifiable group of individuals (or part of a market) where consumers share a
characteristic or need
E.g. demographic, geographic, behavioural, psychological, race, income
Use it to develop a product/target a specific group through marketing
1.1.3 MARKET POSITIONING
MARKET MAPPING
Technique used to understand how products/businesses are viewed relative to
competitors, based on two relevant characteristics
4
BUSINESS Exam board: Edexcel
This revision book is packed with key notes that will help you gain a solid understanding
of each theme.
THEME THREE: Business decisions and strategy
CONTENTS 3.1.1 Corporate objectives page 49
3.1.2 Corporate strategy pages 49-51
3.1.3 SWOT analysis pages 51-52
THEME ONE: Marketing and people
3.1.4 Impact of external influences pages 52-55
1.1.1 The market page 4
3.2.1 Growth pages 56-57
1 3.2.2 Mergers and takeovers pages 57-59
3.2.3 Organic growth pages 59-60
3.2.4 Reasons for staying small pages 60-61
3.3.1 Quantitative sales forecasting pages 61-62
3.3.2 Investment appraisal pages 62-66
3.3.3 Decision trees pages 66-67
3.3.4 Critical path analysis pages 68-69
,1.1.2 The dynamic nature of markets page 5
1.1.3 Market positioning page 6
1.2.1 Demand page 6
1.2.2 Supply page 7
1.2.3 Markets pages 7-8
1.2.4 Price elasticity of demand page 8
1.2.5 Income elasticity of demand pages 8-9
1.3.1 Product/service design page 9
1.3.2 Branding and promotion page 10
1.3.3 Pricing strategies pages 10-12
1.3.4 Distribution pages 12-13
1.3.5 Market strategy pages 13-15
1.4.1 Approaches to staffing pages 15-17
1.4.2 Recruitment selection and training page 17
1.4.3 Organisational design pages 18-19
1.4.4 Motivation pages 20-21
1.4.5 Leadership page 22
1.5.1 Role of an entrepreneur pages 22-23
1.5.2 Entrepreneurial motivates/characteristics page 23
1.5.3 Business objectives page 24
1.5.4 Forms of business pages 24-25
1.5.5 Business choices page 26
1.5.6 Entrepreneur to leader page 26
THEME TWO: Managing business activities
2.1.1 Source of finance pages 27-28
2.1.2 Methods of finance pages 28-29
2.1.3 Limited liability page 29
2.1.4 The business plan pages 30-31
2.2.1 Sales forecasting page 31
2.2.2 Sales, revenue, costs pages 31-32
2.2.3 Breakeven page 32
2.2.4 Budgets page 33
2.3.1 Calculation of profit page 34
2.3.2 Statement of financial position pages 35-36
2.3.3 Business failure page 37
2.4.1 Methods of production pages 38-39
2.4.2 Capacity utilisation page 40
2.4.3 Stock control pages 41-42
2.4.4 Quality pages 43-44
2.5.1 Economic influences pages 44-47
2.5.2 Legislation page 47
2.5.3 The competitive environment pages 47-48
Theme one
1.1.1 THE MARKET
2
,MASS MARKET
Aimed at general population with a
generic product NICHE MARKET
Potential for large sales revenue A subset of the main market; addresses
Possible high competition, need to be specialist needs
competitive on price in order to succeed Few competitors but limited numbers of
EOS and lower average unit costs potential customers
Large volume of sales means high sales Businesses will have to compete on quality
revenue. This can be used for research and customisation in order to succeed
and development High profit margins as can charge premium
- High competition price
- Homogenous products need to be Small scale production so can be flexible and
differentiated through marketing, this can follow trends
be expensive Less competition than in mass markets
- High volume production isn’t flexible to - Very risky as demand may not be constant
demand changes - Higher unit costs so no EOS
DYNAMIC MARKETS
One that is subject to rapid or continuous changes
Adapting in a dynamic market
Being flexible in the way the business operates
Market research to have better understanding of the market
Investment in new technology, people, products
Continuous improvement
MARKET SIZE AND MARKET SHARE
Market size can be measured through: MARKET SHARE =
- VOLUME OF SALES: total quantity sold SALES OF A BUSINESS X 100
by business TOTAL SALES IN THE MARKET
- VALUE: total amount consumers spent
on product
Market share: the proportion (%) of a market that is taken by a business, product or
brand. It can be used as a measure of success
1.1.2 MARKET RESEARCH
PRIMARY RESEARCH
Original data gathered by researcher
+ Up to date information; reliable
3
, + Tailor to meet business needs
- Time consuming
- Expensive to conduct
- Low response rates can distort findings
- Is sample representative?
SECONDARY RESEARCH
Research that already exists. Conducted by another organisation
+ Easily accessible and a good starting point
+ Less time consuming
+ Better to collect quantitative data
- Detailed reports can be expensive
- Not always up to date or tailored to business needs
MARKET ORIENTATION
PRODUCT ORIENTATION The consumer is the most important factor when
Product is developed with quality/functions in providing products for the market. The business
mind but not necessarily in line with has a sensitivity to customer requirements.
customer requirements This helps business to respond to customer
Focus on what business is good at BUT it needs BUT needs can be fast changing, which
may not sell well this could be costly or potentially weaken the
brand
Benefits + limitations of market research
+ Reduces risk and cost of making poor decisions
+ To react to and prepare for changes in the market
+ To become market orientated
- Often biased
- Reliable?
- Collecting data is time consuming
- Cost effective; are costs worthwhile?
MARKET SEGMENTATION
An identifiable group of individuals (or part of a market) where consumers share a
characteristic or need
E.g. demographic, geographic, behavioural, psychological, race, income
Use it to develop a product/target a specific group through marketing
1.1.3 MARKET POSITIONING
MARKET MAPPING
Technique used to understand how products/businesses are viewed relative to
competitors, based on two relevant characteristics
4
